2.5-CENT TOWNTAX INCREASE
HAMMONTON—The town’s 2023 municipal budget was introduced at the May 22 meeting of town council.
Town Auditor Leon Costello—of Ford-Scott Associates of Ocean City—spoke about the budget.
“This has been a very unique year,” Costello said.
Costello said that the firm represents 51 towns, and called the budgetary process for each a “nightmare.”
“You’re faced with enormous increases in health benefits—22 percent—pension—almost 17 percent—and other insurances; all across the board, major, major increases in all your expenses,” Costello said.
Costello said that these costs will realize a 2.5 cent increase for taxpayers.
Costello said the increase was “phenomenal,” noting the increases in other municipalities, some of which will see an 8.5 cent increase.
“This budget is not a fault of what you’ve done. These increases have been presented to you and every other town,” Costello said.
Otherwise, Costello said, Hammonton is financially sound.
“You didn’t ask for these expenses. You can’t get rid of them. You pay the pension bill on August 1 or Frank [Zuber, the town’s business administrator] goes to jail. You pay the health benefits when it comes due. You can’t say, ‘we’re not going to do it,’” Costello said.
Costello noted that council was set to hold the introduction of Ordinance No. 011-2023—Establishing a CAP Bank for the 2023 Budget.
“With these increases, there’s no way your budget would fit in without that increase. You could levy another $1.2 million in taxes if you wanted to; you’re well under the levy cap. The spending was the killer this year,” Costello said.
Mayor Stephen DiDonato said that the 2023 budget is $943,600 higher in spending than the 2022 budget, due to the increases Costello mentioned but also other factors like salaries, fuel, solid waste and recycling.
“The increase that’s proposed of 2.5 cents is approximately $350,000. As you can see, we closed the gap by two-thirds, approximately, of $650,000 through some surplus use, through some other innovative ideas—and just running with a tight budget,” DiDonato said.
Councilman Steven Furgione commented further.
“Our state aid increased by $10,000. $10,000. Our state aid has been flat at $1.27 million for years,” Furgione said.
Following the meeting, Zuber provided the exact figures to The Gazette.
“From 2011 to 2022 we received $1,272,714. This year we received $1,281,272,” Zuber said.
The total increase in state aid is $8,558.
“Mr. Costello, how much should our state aid be, ballpark?” he said.
“Double what you’re getting,” Costello said.
Councilman Sam Rodio thanked DiDonato for doing “a heck of a job.”
“You’re the bigger part of the budget than any of us sitting here, and it really feels good to know that we could come this far,” Rodio said.
Rodio also assured Zuber that he would not be going to jail.
“You’re OK. Maybe the mayor’s going to go to jail here in the end; I don’t know,” Rodio said.
DiDonato credited Zuber with the budget.
“He’s had many sleepless nights. We had a tight budget in ’22; we’re going to have a tight budget in ’23. I keep telling Frank: we’ll make it. Don’t worry; we’ll make it somehow,” DiDonato said.
Councilman Thomas Gribbin said that Hammonton is a fiscally conservative town.
“Based on the numbers here, from the statements that our accountant has said, the low increases; our closed session ran late because the seven of us struggled over this budget, even at 2.5 cents, because we know that impact—but we haven’t cut services. We haven’t shortchanged our employees, and we won’t shortchange the residents of Hammonton,” Gribbin said.
DiDonato then asked for a motion to introduce Ordinance No. 011-2023.
According to the language of the ordinance, town council determined that “a 1 percent increase in the budget for said year, amounting to $113,451.48 in excess of the increase in final appropriations otherwise permitted by the Local Government Cap Law, is advisable and necessary.”
“In the CY 2023 budget year, the final appropriations of the town of Hammonton shall, in accordance with this ordinance and N.J.S.A. 40A: 4-45.14, be increased by 3.5 percent, amounting to $397,080.19, and that the CY 2023 municipal budget for the town of Hammonton be approved and adopted in accordance with this ordinance,” the ordinance states.
Rodio made the motion, which Councilman Edward Wuillermin seconded.
DiDonato said that this ordinance will allow an additional $113,451.48 to be used from surplus funds.
“For the taxpayers of Hammonton, we are using probably $400,000 to $500,000 in surplus to make this budget work that we will not be returning at the end of the year. We’re using $2.89 million. We believe we can return $2.4 million—so we’re probably not going to return $490,000,” DiDonato said.
DiDonato said that this was “a one-time fix.”
“It’s a tight budget, and we’re dancing with the devil, because we need to return that much,” DiDonato said.
Otherwise, DiDonato said, there will be issues creating a budget for 2024.
“We did everything in our power to minimize your increase in taxes, use as much surplus as humanly possible and still be able to put forth a budget next year. That’s where we’re at. It’s not where we want to be, but it’s where we’re at,” DiDonato said.
DiDonato said that county taxes are supposed to lower by two cents.
“Maybe your tax bill won’t go up much—or very, very minimally,” DiDonato said.
DiDonato offered apologies to residents for the increase in taxes.
“I apologize for the situation we’re all in, but it is what it is, and we have no choice,” DiDonato said.
The ordinance passed introduction.
Following that, council entertained Resolution No. 078-2023, Introduction of the 2023 Municipal Budget.
The summary of the general section of the budget is as follows:
Current fund: municipal purposes within caps, $11,839,620.15; municipal purposes excluded from caps, $3,675,128.92; reserve for uncollected taxes, $1,168,764.60. Total general appropriations, $16,683,513.67. Less: anticipated revenues, $6,324,693.63. Amount to be raised by taxation, $10,358,820.04.
The budget will be published in the June 7, 2023 edition of The Gazette. A hearing on the budget and tax resolution will be held at town hall on June 26 at 7 p.m., according to the resolution, at which “time and place objections to said budget and tax resolution of the town of Hammonton for the year 2023 may be presented by taxpayers or other interested persons.”
Wuillermin made a motion to approve the resolution, which Rodio seconded. Furgione commented further.
“It also should be noted: utility’s staying the same. There’s no increase in utility. In addition, we were able to collect the money that was owed to us from COVID, so we are now self-liquidating again, so we put less of a down-payment down for new projects, and we’re able to return a nice chunk of money to surplus,” Furgione said.
DiDonato commented further.
“Yes, your taxes are going up, but your water and sewer rates are not. Please take that into consideration before you tar and feather me on Bellevue and Central,” DiDonato said.
The resolution passed unanimously.
During the report from the Education Committee, Councilwoman Renee Rodio provided an update from the May 4 meeting of the Hammonton Board of Education.
“They were able to pass the budget with a zero percent tax increase for the school period of 2023-2024, and they also passed a resolution for the expansion of the ECEC [Early Childhood Education Center] building. That was just under $5 million, and that will add about eight additional classrooms to the building,” she said.
During the meeting, council entertained Resolution No. 071-2023, making the following temporary emergency appropriations in the town’s municipal budget: Planning Board Operating Expense, $2,500; Fire Operating Expense, $70,000; State Fire Salary & Wages, $5,000; Police Operating Expense, $40,000; Prosecutor Operating Expense, $10,000; Public Buildings & Grounds Operating Expense, $20,000; Recreation Operating Expense, $20,000; Holiday Observance, $10,000; Advertising Operating Expense, $10,000; Telephone, $10,000; Social Security, $20,000; Utility OE, $600,000.
The resolution passed unanimously.
Council also entertained Resolution No. 067-2023, Authorize grant application NPP Grant (Wells Fargo Bank).
According to the resolution, the town of Hammonton will be applying for a grant from the New Jersey Department of Community Affairs in the amount of $700,000 “to carry out a project to Acquire for the Purposes of Adaptive Reuse the former Wells Fargo Bank building located at 236 Bellevue Ave. in Hammonton.”
“The town of Hammonton understands that applications requesting more than $250,000 require a 10 percent match of funds, and hereby resolves to make $70,000, for additional costs associated with adaptive reuse, in matching funds available upon receipt of any award from the New Jersey Department of Community Affairs and in accordance of any agreement between the town of Hammonton and the department,” the resolution reads.
During discussion, Renee Rodio spoke about the resolution and the purchase.
“Maybe it’s too late, but I just feel, at this point in time, the town deserves to be heard on this item—and I was wondering if there was any way that we could table it,” she said.
Renee Rodio put forth the notion of holding a public session for residents to comment on the purchase of the property.
“I just feel like it was placed on the agenda, and the public had no time to react to the purchase of the bank. I just think that we need to do better than that. I think we need to be more transparent,” she said.
Renee Rodio conceded that council did vote to approve the purchase, which occurred at council’s February 27 meeting. Zuber commented further regarding Resolution No. 067-2023.
“There’s a deadline to get the paperwork in, but I’m not sure what that date is,” Zuber said.
“That needs to be in, I believe, in the next day or two,” he said.
DiDonato said that the purchase has been a topic of conversation “for at least three months.”
“I don’t know if anybody has had any negative comments, but I’ve been hearing ‘great idea,’ ‘glad to have the parking,’ ‘we’re glad to have the income from the building,’” DiDonato said.
DiDonato said that the resolution is for grant funding.
“This is a 100 percent grant. There’s a match of $70,000. The building will be acquired—and the closing costs will be paid—from the grant. The match is either in some additional money going forward after that, some marketing, some repairs of the building—and then we’re going to rent this building out to the tune of between $4,000 and $6,000 a month that’ll be a positive income to help offset future years’ taxes,” DiDonato said.
DiDonato estimated that the rent should generate between $48,000 and $72,000 per year, which he said is “close to a half a penny on taxes.”
“It’s at no cost to the taxpayers,” DiDonato said.
Renee Rodio said that finances were her main concern.
“Is it truly going to be worth taking it off of our tax rolls?” she said.
DiDonato replied in the affirmative, noting that the property is assessed at approximately $800,000. According to DiDonato, taxes on the property are somewhere in the $20,000 range.
“Of that, the local taxpayers for the town of Hammonton get $5,000 revenue off this building.
So, we’re going to take a widget that’s paying 15,000 taxpayers $5,000 a year, and we’re going to take that widget over here, and we’re going to take it to $48,000 to $72,000. It’s going to be a 14-times revenue expansion,” DiDonato said.
During discussion, Councilman Jonathan Oliva said that the town receives 25 percent of property tax revenue.
“Roughly $12,000 of that $24,000 goes to the school, and then $6,000 of it goes to the county and then $6,000 of it comes to the town. Taking that $24,000 a year off the tax rolls means the town sees that net decrease of $6,000 annually, but to rent the building at $4,000 to $6,000 per month puts us in a considerable positive,” Oliva said.
“If we had to bond and pay for that—if we didn’t have the possibility of the grant—I would be then saying, ‘Whoa, whoa; what are we doing here? We don’t want to operate as a landlord.’ But, the fact that this could fund an initiative in our budget for years to come? Plus, down the road, if somebody wants to sell this building—10, 15, 20 years down the road—they could sell this building, and then that money would be returned,” DiDonato said.
Renee Rodio asked if there has been interest expressed in the building, and DiDonato responded in the affirmative.
“There’s been a ton of interest in the building. There’s been a ton of phone calls. We cannot talk to anybody; I can just say when we finally acquire it, then we go out to advertise,” DiDonato said.
Furgione commented further.
“This resolution isn’t to acquire; it’s to approve for the grant,” Furgione said.
“It’s another step in the system,” DiDonato said.
As previously reported in The Gazette, the process to acquire the bank began on December 5, 2022, when DiDonato signed a Letter of Intent (LOI) for the municipality’s purchase of the former Wells Fargo Bank at 236 Bellevue Avenue for $675,000.
On February 27, Town Solicitor Michael Malinsky sought a resolution to approve the agreement of sale between Wells Fargo Bank and the town of Hammonton for the acquisition of the bank building and parking lot at 236 Bellevue Ave., Lot 1 of Block 2815, for the purchase price of $675,000.
That resolution did not appear on the agenda for that meeting as released by the town of Hammonton on February 24. The agenda, under Solicitor’s Report, read as follows: “Discuss possible acquisition of Wells Fargo Bank Located 236 Bellevue Avenue Hammonton.”
Wuillermin made the motion, which Oliva seconded. At that meeting, DiDonato said that the town would be applying for grant funding for the purchase.
“We’ve had tremendous success getting grants from the state and federal government, and we have a lot of friends,” DiDonato said at that meeting.
The resolution was approved unanimously.
DiDonato then signed an agreement of sale for the bank dated February 28, 2023, which included the purchase price of $675,000.
During his report at the March 27 meeting of town council, DiDonato spoke about progress on the acquisition of the property.
“Wells Fargo, we had a nice conversation with the representatives who are going to help us get the grant—secure the grant—the other day. We’ve made another step in the process in securing that grant, and I hope to be able to report that we’ve gone over the finish line at the April meeting for that grant,” DiDonato said on March 27.
No mention of the property was made at the April meeting.
As previously reported, The Gazette contacted the Department of Community Affairs (DCA) asking about the “town” form of municipal government, which is Hammonton’s form of municipal government. The DCA directed The Gazette to the relevant statutes.
According to an email from the DCA, “A “Town” form of government is governed by NJSA 40A:62-1 et seq. In the excerpt of state statute pasted below [the statute was included in the email], 40A:62-6 lists “control and regulate the finances of the municipality” as a power of Council. Under 40A:62-5 Powers of the mayor in the excerpt below [the excerpt was included in the email], the mayor does not have any separate purchasing authority. Furthermore, in Local Public Contracts Law NJSA 40A:11-6.1b “Award of Contracts” states that any contract above the bid threshold must be awarded by resolution of the local governing body. The bid threshold is currently $44,000. The mayor can sign such contract only after the local governing body has authorized it by resolution and appropriated the funds in the municipal budget to pay for the contract.”
Following the May 22 meeting, The Gazette asked Zuber if there were items in the municipal budget related to the bank.
“We have down payment money that’s in the budget, but that’s for any project we do. There’s $100,000 in the budget and for our ordinances, and it’s usually five percent down payment, but nothing’s in the budget for that $70,000. No, not yet,” Zuber said.
During discussion of the resolution, DiDonato asked concerned residents call him or to attend the next meeting of town council, noting that “process is important.”
“I want to pack the place. I want to know the good, the bad and the ugly—but I think, right now, I only see sunshine and roses on this deal for the town, short-term and long-term,” DiDonato said.
Renee Rodio replied.
“I don’t disagree with that, but I think that the way that it was handled? It was kind of placed on the agenda without the public knowing about it, and we acted on it,” she said.
Gribbin commented further
“It passed unanimously,” he said.
Renee Rodio conceded the point.
“I’m not disagreeing with that. I’m just, going forward with something like that, I feel as though the public has a right to know earlier,” she said.
Furgione asked if there will still be another vote before council takes “the final step,” and DiDonato replied.
“Once we secure the grant, then we’ll have to take one more vote to go to settlement,” Furgione said.
DiDonato again asked residents to attend the June meeting to voice concerns about both the bank and the budget.
“I’ve agonized over this budget that we presented tonight. I’ve lost a lot of sleep. I don’t want to take an additional one penny out of your pocketbook. One thing—the safety of this community, and your money—is so very important to me, so please; please, please, please, I want you to get involved and come out. Please, I’m begging you,” DiDonato said.
The resolution passed unanimously.
The next meeting of town council will be June 26 at 7 p.m.